Author Topic: Which Vanguard Bond ETF should I use  (Read 661 times)

KTG

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Which Vanguard Bond ETF should I use
« on: May 08, 2018, 06:48:01 AM »
I have some money in BND, but I was wondering if I should be thinking of another place to put some cash I might one day need in an emergency fund. Since BND does have a mix of long term bonds, which are taking a hit right now, the ETF share price has been going on a slow decline. I want to find something that is more stable and probably uses more short term bonds. Any recommendations?

MustacheAndaHalf

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Re: Which Vanguard Bond ETF should I use
« Reply #1 on: May 08, 2018, 07:13:07 AM »
You should take a look at tax-exempt bond funds, in case the yield is better for your tax bracket.  Even if you checked in 2017 - the tax brackets are different for 2018.

I weigh bond funds by yield divided by duration.  It's not entirely fair, but it's a rough way of weighing term risk and yield.  You also need to take a look at the bond quality, since junk bonds ("high yield") get additional yield by taking a much higher risk of default.

What about BSV (Vanguard Short-term bond ETF)?  It has a 0.07% expense ratio, 2.7 year duration, and 2.71% (taxable) yield.  Most of the bonds are government grade (63%) but there's 25% hovering in investment grade (A & BBB).

KTG

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Re: Which Vanguard Bond ETF should I use
« Reply #2 on: May 08, 2018, 07:19:17 AM »
Yeah def no junk bonds or anything like that. I will look into your other suggestions, thanks!

AdrianC

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Re: Which Vanguard Bond ETF should I use
« Reply #3 on: May 08, 2018, 01:44:50 PM »
I have about half BND, half BSV.

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Re: Which Vanguard Bond ETF should I use
« Reply #4 on: May 10, 2018, 11:13:36 PM »
I have some money in BND, but I was wondering if I should be thinking of another place to put some cash I might one day need in an emergency fund. Since BND does have a mix of long term bonds, which are taking a hit right now, the ETF share price has been going on a slow decline. I want to find something that is more stable and probably uses more short term bonds. Any recommendations?
Are you taking dividends into account?